Petitioner Not To Be Deprived Of Benefit Due To Non-Constitution Of Appellate Tribunal By State: Patna High Court

Petitioner Not To Be Deprived Of Benefit Due To Non-Constitution Of Appellate Tribunal By State: Patna High Court

Statutory remedy was sought against the impugned order under Section 112 of the Bihar GST

The Patna High Court has granted relief to the petitioner Cohesive Infrastructure Developers Pvt. Ltd in a Goods and Services Tax (GST) dispute.

The division bench comprising Chief Justice K. Vinod Chandran and Justice Rajiv Roy allowed a writ petition filed under Article 226 of the Constitution of India, seeking various reliefs.

The petitioner sought a statutory remedy against the impugned order before the appellate tribunal under Section 112 of the Bihar Goods and Services Tax (GST) Act.

However, due to the non-constitution of the tribunal, the petitioner was deprived of his statutory remedy under Sub-Section (8) and Sub-Section (9) of Section 112 of the GST Act. The petitioner was also prevented from availing the benefit of stay of the balance tax amount recovery under Section 112 (8) and (9) upon deposit of the amount as contemplated under Sub-Section (8) of Section 112.

The respondent, State authorities, acknowledged the non-constitution of the tribunal. It came out with an 11 December 2019 notification bearing Order No.09/2019-State Tax, S.O.399 for the removal of difficulties in the exercise of powers under Section 172. The GST Act provides that the period of limitation for the purpose of preferring an appeal before the tribunal under Section 112 would start only after the date on which the tribunal’s president/state president enters office after its constitution under Section 109.

Thus, the bench ordered, “This is subject to the deposit of a sum equal to 20 percent of the remaining amount of tax in dispute, if not already deposited, in addition to the amount deposited earlier under Sub-Section (6) of Section 107 of the GST Act. The petitioner must be extended the statutory benefit of stay under Sub-Section (9) of Section 112.”

It added, “The petitioner cannot be deprived of the benefit by the respondents due to the non-constitution of the tribunal. Thus, the balance amount recovered, and any steps taken would be stayed. It is not in dispute that similar relief was granted by this court in the SAJ Food Products Pvt. Ltd. vs. The State of Bihar & Others in C.W.J.C. No.15465 of 2022, case.”

It further stated, “The statutory relief of stay, on deposit of the statutory amount, cannot be open-ended. For balancing the equities, since the order is being passed due to the non-constitution of the tribunal by the respondent authorities, the petitioner would be required to file his appeal under Section 112 of the GST Act. Once the tribunal is constituted and is functional, the president/state president may enter the office. The appeal would then be filed observing the statutory requirements.”

The bench held that if the petitioner decides not to pursue the option of filing an appeal under Section 112 with the tribunal within the specified time, the respondent authorities would be free to act in accordance with the law.

Thus, the judges maintained that if the petitioner complied with the order by making a payment equivalent to 20 percent of the outstanding disputed tax amount, any bank account attachment resulting from the demand would be lifted.